Piketty: After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.
The whole interview is worth a read. Piketty argues that all of Europe needs to hold a conference in order to restructure its debts in a sustainable way—not just Greece’s, but the entire region’s. Fanciful? Maybe. But it’d almost certainly be more productive than what it’s doing right now.